It’s no secret to retailers – omni-channel is critical for success. But how many of them are doing it well? Total Retail just released their list of the Top 100 Omnichannel Retailers, where they scored the retailers based on the omni-channel experiences they offer to their customers. The retailers were ranked based on seven key components that help drive a seamless omni-channel experience. It’s a fairly simplistic approach, but still, only four were awarded a perfect score!
Here’s what’s happening — as customers more frequently go online to purchase, the ability of retailers to support that buying journey across all channels of interaction becomes more complex. Many retailers still maintain multiple systems that have historically supported customers in a single channel. Those systems lack the key capabilities required for omni-channel success, and trying to patch them together creates inefficiencies that make delivering a seamless experience to the customer unsustainable, due to manual processes that have to be implemented to fill in the gaps!
In a recent blog, I made the case that even though physical stores continue to close, they are still a critical component of a retailer’s omni-channel strategy. To recap, retailers are scrambling to meet the needs of customers and their demands to shop across various channels of their choosing, but some retailers are doing so at the peril of profitability. This is the new battleground. As more customers go online to purchase various items from the retailer, the cost associated with fulfilling those orders, with free shipping or through a local store, currently outpaces the cost of having the customer come into a physical store to make that purchase. With the inefficiencies that currently exist in fulfilling an online order through the physical store, as well as the actual cost of shipping an individual parcel to a customer, retailers are losing margin each time a customer buys an item online, whether it’s fulfilled from the store or a distribution center.
Omni-channel success can be profitable
It is not necessarily a single channel like the store that is causing retailers to lose money, but rather the whole process of satisfying the omni-channel shopper. But what choice do retailers have, if they want to maintain brand loyalty by offering the customer what they want, when and where they want it? The only way a retailer will be able to process the amount of data required to make the right decision to optimally satisfy a customer in an omni-channel world is to establish a flexible commerce foundation that incorporates all channels. This foundation includes both the physical store and call center, and leverages cognitive capabilities to optimize sourcing decisions in real-time.
In Total Retail’s list of Top 100 Omnichannel Retailers, how effectively a retailer provides omni-channel services is measured, but whether they are doing so profitably is not. While many retailers can claim they provide omni-channel services, they may be doing so through manual processes. If you want to be around in a few years, you have to put in place an infrastructure that achieves omni-channel success from the standpoint of the customer and also safeguards your margins.
Many of the leading retailers in this report are using IBM’s Order Management solution to not only provide customers with an omni-channel experience, but to also set up the foundation to turn profitably.
Retailers are finding that only IBM can give them the solutions required to compete in this challenging environment. To learn how you can use provide profitable omni-channel experiences for your customers, visit the IBM Order Management marketplace.
So – which retailers are doing omni-channel well? Target and Abercrombie & Fitch are just a couple of top performers. From the Top 100 Omnichannel Retailers report, two of the top four omni-channel merchants, and over 60% of all retailers listed, are using IBM Order Management.
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